Eric Jackson and the Search for the Next 100 Bagger

Summary

The Compound and Friends — Eric Jackson and the Search for the Next 100 Bagger

Episode Date: November 7, 2025
Guests: Downtown Josh Brown (Host, A), Michael Batnick (Co-host, B), Eric Jackson (Guest, C)

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Overview

In this invigorating episode, Josh Brown and Michael Batnick sit down with Eric Jackson—founder of EMJ Capital and the face behind the “Open Army”—to discuss his wild success picking high-conviction turnaround stocks, the dynamics of meme investing, the psychology of 100x (100-bagger) bets, and the changing culture of capital markets. Eric reflects on personal lows, career resurrection through monster stock picks like Carvana and Opendoor, and the power of grassroots retail investor movements. The trio also dissect the chaotic state of AI investing with a spotlight on OpenAI’s surreal narrative, before rapid-firing through Eric’s current favorite “potential 100-bagger” picks.

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Key Discussion Points & Deep Dives

1. AI Investing Mania & OpenAI’s Bizarre Moment

Timestamps: 09:00–36:30

• OpenAI's Influence While Private:

  • OpenAI is unparalleled in its influence but, unlike the big publicly traded AI firms, remains private even as it nears a trillion-dollar valuation. This secrecy frustrates investors and adds risk and opacity to the entire market.
  • “I never thought I’d see the day when a company would hit a trillion in valuation before IPOing, and yet that seems like that could literally happen.” – Eric Jackson (11:08)

• Market Implications of Private Giants:

  • The crew discusses regulatory loopholes letting massive companies with hundreds of indirect shareholders avoid going public.
  • The interconnectedness between OpenAI and giants like Microsoft, Nvidia, and Meta means that OpenAI’s behavior, finance, and leadership have an oversized impact on major public stocks.

• Sam Altman's Public Meltdowns:

  • Recent podcast appearances and social media spats (notably with Elon Musk) highlight Altman’s erratic and defensive behavior.
  • “There’s so many people that reacted to [his comments] saying, oh, this is the sign that this is the top and we’re ringing the bell... I think there is some defensiveness in him. There is some weird vibes you do pick up on.” — Eric Jackson (17:48)
  • Altman’s comments about wishing he could “burn shorts” if OpenAI were public and telling allies he could easily replace their stock are called out for their weirdness and importance.

• Risks of AI Euphoria:

  • Widespread commitments ($1.4 trillion over eight years) to OpenAI raise questions about the sector’s sustainability and the ripple risk if OpenAI stumbles.
  • Market matches previous tech cycles, but the speed of adoption (e.g., ChatGPT) dwarfs anything before—including TikTok or the iPhone.
  • Key additional risk factors: energy grid capacity, social backlash if costs are passed to consumers, and the ever-looming potential for demand to disappoint.

• Notable Quote:

  • “If you look at the CapEx, you can only conclude that the smartest people in the room believe it’s the most valuable trophy of all to capture.” – Josh Brown (29:04)
  • “I think the biggest risk is going to be that the energy grid can’t keep up with the demands.” – Eric Jackson (30:21)

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2. The Art and Life-Altering Power of 100-Bagger Investing

Timestamps: 36:30–61:15

• Eric Jackson’s Journey: Boom, Bust, and Reinvention

  • Jackson relives hitting near rock-bottom after losing his fund’s major backer following a harsh drawdown, only to forge a comeback with concentrated, high-conviction bets.
  • “I had this billionaire like turn his back on me and walk away… I’ve gone through like this internal crisis and stuff. So like when people say like, oh, how do you have the gall… I just don’t care.” — Eric Jackson (61:00)

• The Carvana and Opendoor Case Studies:

  • Jackson had previously pitched Carvana and Opendoor as comeback “dead stock” picks when no one wanted them (38:00).
  • Carvana’s CEO and execs demonstrated conviction by personally making enormous buys at the low, including one CPO dropping $3.5M at $7.50/share.
  • Extreme price volatility proved the value of “buying the dip” and sticking with conviction; these stocks ultimately delivered 10x–100x returns.
  • Key insight: Massive price move potential comes from being mispriced for bankruptcy, then resetting
  • “These hundred baggers… get priced as if they’re going out of business, but when they start moving up, it’s violent, you know, especially with a lot of shorts.” — Eric Jackson (47:05)

• Grassroots, Meme, and “Open Army” Power:

  • Jackson pioneered using viral social campaigns and daily videos (e.g., in front of Drake’s house) to rally retail investors around Opendoor stock.
  • The board’s initial resistance gave way to engagement as they recognized the share-moving power of this new “army”.
  • “It’s...a new version of Gamestop. You know, it’s a retail group, but they are much smarter than what you typically...get from Wall street towards retail.” — Eric Jackson (61:51)

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3. Modern Investor Culture: Embracing the Circus

Timestamps: 36:25–41:00, 57:58–61:40

• Modern Investors Love Unconventional CEOs:

  • New norms embrace wild CEO behavior—telling off Shorts, engaging in social drama—because younger investors enjoy the spectacle and identify with the underdog.
  • “They love seeing the leadership...act as unconventionally as possible, telling people to go f*** themselves if they don’t agree. It’s almost like a version of pro wrestling.” — Josh Brown (36:25)

• Social Media as Investor Community:

  • The convergence of stock research, retail speculation, and meme madness—in forums like Twitter and through figures like Jackson—reshapes what it means to be a stock “influencer”.

• Responsibility and Risk:

  • Jackson acknowledges the weight of influencing “regular people” jumping in with real money. He sees the tension between “lottery ticket” hope and genuine fundamental research—he urges caution but also sees himself as a role model for positive engagement.

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4. Rapid-Fire Lightning Round: Eric’s Current 100-Bagger Plays

Timestamps: 69:14–81:18

• Philosophy: Only stocks that could theoretically 100x enter his portfolio.

  • “Nothing goes into my portfolio that I don’t feel has that possibility...could be four years, could be five years.” — Eric Jackson (69:14)

• Highlighted Current Bets:

  • Opendoor (OPEN): Reviewer favorite; thesis based on morphing into mortgage/title, short squeeze potential, and retail mobilization.
  • Better.com (BETR): Mortgage originator, leverages AI to eliminate thousands of manual jobs—famous for viral CEO firing Zoom clip.
    • “I think this is going to be the poster child for why AI is not a bubble.” — Eric Jackson (69:58)
  • Iron (IRN) & Cypher (CIFR): Data center and infrastructure plays.
    • Transitioned from bitcoin mining to leasing out high-demand data center capacity to AI/cloud companies.
    • “When I was buying it at nine bucks … people were saying ‘these guys are just former bitcoin miners.’” (76:12)
  • Sana Biotechnology (SANA): Potential cure for type 1 diabetes; stem cell and biotech moonshot.
    • “They...cured [patients] of type 1 diabetes.” — Jackson (77:37)
  • BTQ Technologies: “Post-quantum cryptography” (cybersecurity for the quantum age).
    • “They’re trying to be the Crowdstrike for quantum.” — Eric Jackson (79:48)
  • Defi Technologies (DEFT): Tokenizing sovereign debt and crypto-native ETFs in Europe.
  • Etha ETF (ETHA): Bullish on Ethereum through liquid ETF.

• Meta Portfolio Strategy:

  • Jackson and Brown riff on launching a tongue-in-cheek “lottery ticket ETF” for retail investors, explicitly targeting those seeking moonshot returns.
    • “My new active ETF, it’s a collection literally of lottery tickets. Get long this thing with money that, if it goes to zero, you don’t care… This is explicitly what I’m doing.” — Josh Brown (82:56)

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5. Memorable Quotes & Banter

On OpenAI's Market Power:

“These companies never get profitable first. They always go at breakneck speed, right?” – Eric Jackson, (27:50)

On the Modern Investor Audience:

“The audience for these antics is 27 years old… They love this shit. It’s a spectator sport.” – Josh Brown, (36:25)

On Surviving and Bouncing Back:

“I’ve gone through so much crap...so like when people say, how do you have the gall… I just don’t care. I believe in Opendoor. I believe in the types of philosophies that I’m advocating.” – Eric Jackson, (61:00)

On Meme Stock Risks:

“If something goes wrong, you kind of become forever associated with, for better or for worse.” – Josh Brown, (60:21)

On the Lottery ETF:

“You’re going to get, you’re going to get me into merch… the more extreme version of something is the one that wins… That’s the thing that happens.” – Josh Brown (81:53)

On the Open Army’s Spirit:

“I get so many messages from people saying, you know, hey, I’m an electrician, I’m a pipe layer or whatever… spent three, four hours a night studying stocks…” – Eric Jackson (86:01)

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6. Notable, Amusing, or Viral Moments

• Drake’s House Videos:
  Eric films daily videos in front of Drake’s house in Toronto as part of his “Open Army” campaign. His bodyguard (“Bucky”) becomes a fan and an investor.
  “He let me finish... he comes over and he’s like, ‘guys, what’s going on here?’ …And I whipped out Yahoo Finance… it’s called Opendoor… and we think it can 100x… ‘I’m buying this thing on Monday morning.’” – Eric Jackson, (66:23)

• Open 82 Party in Vegas:
  Listeners around the globe pledge to attend a future party in Vegas if Opendoor hits $82, with memes and AI videos already in circulation. (88:28–89:06)

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Important Timestamps & Segments

• AI Investing & OpenAI’s Role: 09:00–36:30
• Eric Jackson’s Investing Resurrection: 36:30–41:00; Carvana/Opendoor details: 38:00–47:00
• Modern Meme Investor Culture: 36:25–41:00
• Open Army, Drake Videos: 63:31–68:20
• Eric’s Lightning Round Stock Picks: 69:14–81:18
• Meta/“Lottery Ticket” ETF Riff: 81:19–84:23
• Eric on the Open Army’s Middle-Class Base: 85:24–86:26
• Closing Party/Jokes on Risks: 88:11–89:49

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Conclusion

This episode is a wild, energizing ride into the mind of a high-conviction, high-volatility investor in the social media age. Eric Jackson’s blend of personal resilience and market insight, coupled with the hosts’ honest skepticism and sharp wit, make for an essential listen on how investing has changed—and may never be the same again.

Summary prepared by your podcast summarizer — the whole story, no hype missed.

Transcript

[A]

I'm doing this show without a laptop for the first time ever. I just want to be able to show you guys my versatility.

[B]

Did you leave it at home?

[A]

Yeah, I'm going out to dinner tonight. I want to schlep a bag. A bag on my back. What? Oh, no, I still got in case you were worried.

[C]

This is like the Mad Mad money special effects board.

[A]

You know what, it turns out, John, I think I do need that laptop stand because I'm gonna put my phone up, prop it up. Dude, you look like a million bucks. You do. Nobody else is saying that to you. You look great.

[C]

Ah, I guess it's a cold wind in Canada.

[A]

Is that what you gotta. You got a wind burn, but it looks like a suntan.

[C]

Yeah, right.

[B]

You catch a few 10 bigger.

[A]

Well, you've been outside, you've been outdoors a lot, so it's honest. It's understandable.

[C]

Of course.

[B]

It was so goddamn windy last night. My house is creaking.

[C]

Was actually colder here today than it was in Toronto.

[A]

Dude, I hate this. I hate a lot of people like the fall.

[B]

So I like, I actually like daylight savings time. I like that it gets lighter earlier. But the nighttime darkness. What do you mean? Yes, it is in the morning gets light earlier.

[A]

No, the morning just starts earlier. It doesn't get lighter earlier.

[B]

We're saying the same thing. When you wake up, it's light. No, but Getting dark at 4:30 is depressing as shit. Yeah, I could actually chemically you up.

[C]

Well, I like to go to Drake's early morning. So I actually, actually prefer like the sun rising above 7am, 6:45am and I actually preferred it when it was like darker. All of a sudden it started getting.

[B]

Do they have restraining orders in Toronto?

[C]

When I first told my wife I was, I was doing this because my, my 16 year old son said, you know this dad, this is a, this is a surefire way to, to get attention. You need to do this.

[A]

He was right.

[C]

He was right. He was totally on the mark. But she was like, you can't do that. You know the police are going to, they're going to arrest you. You're going to be on the front of their cruiser.

[A]

Do you live in that neighborhood?

[C]

I'm like five minutes away, so basically yeah. But I'm not in one of these mansions that Drake said. Not yet, no. But, but my wife was all worried.

[B]

My wife door goes to 82. You will be.

[C]

My wife was like, you know, if you do those videos, you can't show his house number because Then people can find him. I mean, like, honey, he's on the Kendrick Lamar album. Like, it's the Google Maps, like, photo.

[A]

It's literally the. It's literally the album cover or the color to this. The single is Drake's Mansion with a lot of not Amber Alerts, but whatever those. It's not. It's really bad. Yeah, it's very bad.

[C]

Straight from Google Maps.

[B]

So wait, are you doing that every day? And what are you doing?

[C]

Today was day 80. What do you do here live from New York?

[A]

Let's not step on the. Let's not step on the. On the show. Well, we're gonna get to. We're gonna get to all that.

[B]

All right, so you promise. You promised multiple 10 baggers for us today?

[A]

Yeah.

[C]

Yeah.

[A]

How many? 10.

[C]

We're going after 100 baggers here, Michael. Come on.

[B]

That's my bad. I'm sorry.

[C]

100 baggers.

[B]

I was thinking small.

[C]

10 baggers.

[B]

I was thinking small. You know, when you tweeted the open door, was it 80 cents? I swear to God, I almost bought. I said, this guy, he's got something.

[C]

It was 88 cents.

[B]

88 cents.

[C]

The moment I tweeted, I bought it earlier, I bought it like 70 something.

[A]

What's the price today?

[C]

Seven. Well, it was seven bucks. I think it dipped.

[A]

But it got to. But it got to 10.

[C]

Got almost to 11.

[B]

Are you.

[A]

Nobody can be. So now nobody can be mad at you because.

[C]

Oh, yeah, it keeps going down.

[A]

Nobody has the right to be mad at you. I should rephrase that. Has the right to be mad at you because it 10 bagged. Yeah, you. Now you're saying it's a hundred bagger. But I'm just making the point like it did 10 back. Like, people that bought it had ample opportunity to take a profit if they wanted to. You're not their financial advantage.

[C]

No, I think. I think it would. I think at the height it was like 20 bag.

[A]

Wow.

[C]

Yeah.

[A]

Unbelievable.

[C]

Not bad, but no, people still get mad. It drops. You know, you get the hate tweets. You get the hate DMs. Well, tweet something. Do you know, get the stock price up?

[A]

Respectfully, A, welcome to my world.

[C]

B.

[A]

B, this is. This is the lifestyle you have now chosen.

[B]

You made your be.

[C]

That's right.

[A]

I think it's going to work out for you. I actually have some ideas for you, but we'll do the show.

[C]

All right.

[A]

John, what episode are we doing here today? Josh, we are on the compound and Friends, episode two. Oh, my God.

[B]

Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor. Today's show is sponsored by Victory Capital. Not all growth is created equal. While traditional growth investing focuses on revenue expansion, the Victory Shares Free Cash Flow Growth ETF Ticker GFLW tracks an index targeting something more powerful, profitable growth. GFLW provides exposure to high quality large cap US Companies that don't just grow, but generate free cash flow efficiently. The Victory Shares team believes strong free cash flow indicates a high quality company because it demonstrates a business's cash generating ability after all expenses. The ETF's index follows a process screening companies for strong free cash flow, return on invested capital, filtering for the highest growth prospects and and finally wading towards companies with positive momentum. Explore how GFLW could fit within your [e-mail] investing involves risk, including possible loss of principal. Victory shares ETFs distributed by Victory Capital Services, Inc. Carefully consider the fund's investment objectives, risks, charges and expenses before investing. For a prospectus or summary prospectus containing this and other important information, visit www.vcm.com prospectus. Read it carefully before investing.

[A]

This episode is sponsored by Apex Fintech Solutions. The time to compete for next gen clients is now. Transforming your business for the future might seem like something you can push off, but every year you wait, the further behind you fall, eventually you won't catch up. Augmented Advice from Apex gives you the power to to be what the next generation wants on your terms. It's a modern on ramp to tailored advice using your brand, your personal touch. Backed by Apex Innovation. Learn more at apex fintech solutions.com/Augmented advice welcome to the compound and friends. All opinions expressed by Josh Brown, Michael.

[B]

Batnik and their castmates are solely their.

[A]

Own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain.

[B]

Positions in the securities discussed in this podcast.

[A]

Ladies and gentlemen, welcome to the biggest investing podcast in the world. Super excited for today's show. We've been talking about it all week and giddy anticipation. We have a returning champion back in the house with us.

[B]

Fourth time.

[A]

I don't know, you've been on a bunch, but you're one of our favorite. You know you're one of our favorite people and quite frankly, what I've watched you do over the last couple of months has been really exciting and I did openly ask a question that I know you weren't thrilled with on the show about your activities, which I'm going to give you a chance to tell me.

[C]

You weren't the only one.

[A]

All right. I'm going to give you a chance to tell me why I'm an idiot. But all things considered, it's really cool to watch this career renaissance that you're going through. I think it's. I think it's awesome. And we're going to get into the old guys. All right, guys. Eric Jackson is the founder and portfolio manager of EMJ Capital and AI driven, of course, tech focused investment firm he launched in 2017. Over the past six months, Eric became widely known for leading the Open Army. Shout out to the. Wait, you just turned me off.

[B]

I did nothing.

[A]

Yeah, you did. I'm plugged into you.

[B]

I'm doing nothing.

[A]

I'm plugged into you. You did something with your volume, Duncan.

[C]

John, we need sound.

[A]

Just turn your volume down.

[B]

Oh. Cause I'm getting beeps, that's why.

[A]

Okay. Do not disturb on your phone.

[B]

All right.

[A]

All right. Still didn't work.

[B]

It's not working. John.

[A]

John, come. Come over here.

[B]

Keep going.

[A]

All right. Anyway, let me keep reading your intro. Known for leading the open army, we are not AI driven, in case you couldn't tell. A grassroots investor movement supporting Opendoor, helping reframe its narrative and driving one of the most dramatic turnarounds in the public markets. Eric is also the creator of Rising Dynasty, a growing community of investors focused on power, law, outcomes, conviction, and long term asymmetric opportunities. Can I ask you a question? If you're in the Open army, are you also in Rising Dynasty or do you have to buy each of those memberships separately?

[C]

It's. I think you get. You get two more automatic, automatically entered into Rising Dynasty, started in the Open Army.

[B]

All right.

[A]

For Jesus Christ, one movement was good enough. I'm just saying we.

[C]

It turns out we were bigger than open. All right, we were bigger.

[A]

It's about more than just open. I got that.

[C]

All right.

[A]

In December, Eric will be launching EMJ X, a Gen 2 multi asset, AI driven digital asset treasury company where he will serve as chairman. Prior to founding EMJ Capital, Eric managed capital at Ironfire and Spring Owl Event Driven Partners where he invested in companies including Yahoo and Viacom. He holds a PhD in management from Columbia University. And I'm sorry, that's all the time that we have, ladies and gentlemen.

[B]

You're doing the digital asset thing. Are we going to talk about that later?

[A]

Yeah.

[C]

Well, let's do it.

[A]

All right, so. Well, let's not do that first we gotta start with the general market because I think this is the week that something materially in the narrative about AI investing has sort of made a left turn. And Michael suggested we do this in order, which I think is a pretty good idea. The OpenAI thing. I describe this to Kramer. It's the biggest player on the board, and yet he's still not in the movie. Like, in other words, it's like Keyser Soze. Like, he's on everyone's lips. Sam Altman on everyone's minds. He's doing deals with everyone. But he doesn't have a public company. So, yeah, we get some financial information, but it's selectively distributed. Very confident in my assertion. Got it. All right, let me do the intro again. And so stop him from whatever that was. He was doing it. Okay.

[C]

All right.

[A]

So the point is, given how the centricity of OpenAI to the whole AI investing theme, it's a pretty remarkable situation that it's the only one that's not public, that's like, materially anthropic to materially important to all these public companies. Earnings outlooks.

[B]

Right.

[A]

And CapEx Outlooks, Microsoft Future revenue growth. And it's. It's a wild situation. Before we get into the chronology of what took place over the last week, do you feel the same way? That it's. It's really a situation that we've never seen before? Or maybe I'm wrong about that.

[C]

No. Well, like, as a public markets investor, I hate that all these companies like Stripe and OpenAI are still sort of clinging on to this. Zuckerberg, I think, was the original guy who inspired this idea of just stay private forever. And I never thought I would see the day when a company would hit a trillion in valuation before ipoing. And yet that seems like that.

[A]

That literally might happen.

[C]

Yeah.

[A]

Now, that couldn't have happened in prior eras because there used to be a rule, maybe it still exists, but not being enforced.

[C]

Right.

[A]

That if you have more than 500 shareholders, you are de facto a public company. Therefore, you must file financials at the SEC and be a public company.

[C]

Right.

[A]

Does that law still exist?

[B]

We just.

[A]

We're ignoring it or.

[C]

Yeah, I think. I think we are. And what, Wait, it's a law.

[B]

They're not ignoring it.

[A]

They are, because these investors are in a fund. Oh, that's. They're counting the fund as one shareholder.

[C]

Right.

[B]

But also, access to capital markets. You would have had to go public because back in the day, corporate companies were not doing $30 billion investments.

[C]

Right.

[A]

So prior to this week I asked him a question. So, so yeah.

[B]

You never cut in?

[A]

Well, no. I'm really curious what you think the level to which this is extraordinary. I mean, am I overstating it? Am I understating it? What do you think is the, is the situation?

[C]

Well, they are like probably the biggest private firm. No question. And you are right that they are linked up to all these other mega mag sevens that everybody already cares about so much. And so it's, it is. And they have this guy who, you know, everybody freaked out about with his Brad Gerstner comments last weekend. And I've never heard so many references to Jeff Skilling, Enron, and the comment that he made in like 2020 or no, 2001 on an earnings call where he called one of the analysts an a hole for not knowing, you know, questioning his financial models or something. It was that same kind of vibe. And so there were, you know, there's so many people that reacted to that saying, oh, this is the, the sign that this is the top and we're ringing the bell. Now this is obviously an AI when.

[A]

The founder starts yelling at Wall Street. Yeah, okay.

[C]

How dare you question me for like, you know, how I could spend 1.4 trillion on outlays for the next eight years.

[A]

So, so, so we're going to get to that. All right, go ahead. But let's, let's start from the beginning of, of the saga over the last week.

[B]

So prior to this week, OpenAI was operating mostly in the background. I know people that were following the story obviously were familiar with Sam. He's public on Twitter. But they were merely for the general public. They were the ones that was powering all of the announcements. The oracle pop the this. But this was the week that they really took center stage. So here's what happened in summation. We're going to dive into each of these. So it started with the restructuring. Restructuring for them to pave the road, to go public. That's, that's what kicked us off. Then Elon and Sam Altman got into a fight on Twitter. Sam's Sam's co founder. The deposition came out this week and not pretty. A lot of ugly allegations in there. Then Sam, as we mentioned, was on a podcast with Brad Gerstner and Satya and got super defensive about very reasonable questions, attacking made up shorts. And then the CFO yesterday stuck her foot in the mouth and said the government might need to backstop them. Everybody's like, wait, what?

[A]

She didn't actually say that.

[B]

And Then them saying, today, no, no, no ipo. And then, of course, the denial, Sam. And her saying, no, no, we don't. We don't want a government backstop. We just want X, Y, and Z.

[A]

Let's take these one by one. The restructuring. Microsoft is already consolidating these losses from their OpenAI investment. Like, that's like a. That's a thing that's already happening. But clarifying what Microsoft stake is, is an important step toward the ipo, because, like, they're going to. They end up with what percentage? 27% or something. What's the number? And a 20% claim on their revenue. Okay. That, I think, is what shoves this whole thing into broad daylight. Like, okay, they're on the IPO Runway, even if there's no timetable attached, they are now saying, we're moving forward. And this is the first step that. One of the first steps we have to take. I don't know. What was the Elon.

[B]

Sam fight, by the way? Just the trillion dollar mark. Like, IPO. Come on, come on. On $20 billion of revenue. All right, so, Sam, hold on. Let's start here. So Brad Gerson was defending what he was saying. People reading too much into Sam being feisty. I love that about him. And our founders, we laughed about it after. If you listen to his words, here is what is said. And I think Bucha Capital made the point. And I know you love that guy. Said, Sam breaks people's brains, just like Elon. It's a thin line between grifter and visionary. And creating true believers to harvest their capital requires rhetoric that makes non believers recoil. Elon hates Sam not just because he stole his company, but his whole playbook. And Josh and I were just talking about this like it's a similar thing to what Karp is doing. Galvanizing the shareholder base, pumping up the stock, getting mad at everybody else. It's not too dissimilar from what you're trying to do, but it's an effective strategy.

[C]

Yeah, I mean, I'm not the biggest Sam Altman fan. I love Alex Karp. And people take shots at Alex Karp because Alex Karp of Palantir, he was on CNBC earlier this week doing the same thing against Michael Burry. That went well, you know, and. But he's always been like that. He's always not an antagonistic approach to these. To the. To the shorts. So it's not affected. It's not him. I don't know. I don't think it's anything more than the Fact that he doesn't like these shorts. He believes in his company.

[A]

I agree with you. I don't think that's as performative as some people think. I do think there's some element of it, like, let's create this us versus them thing for the retail shareholders so that we have this army of defenders. I think there's a tiny bit of that. But I genuinely think when you build a company over 20 years, you become completely intertwined with it to the point where somebody saying something negative about your company, it's like somebody insulting you or slapping you in the face.

[B]

But Karp seems authentic.

[A]

That's my point. I think it's genuinely insulting to him when somebody is saying, I'm going to short your stock because it's almost like I'm going to bet against you personally.

[C]

Right.

[A]

So I totally, I, I totally get.

[C]

That Sam gives off a different.

[A]

Sam doesn't have a stock to bet against, though.

[C]

No. And like, I don't know if I put my junior psychologist hat on. Like, there is like some defensiveness in him. There is some like, weird vibes you do pick up on. There have. There, there is a lot of smoke around this company. Like, we haven't even touched on the fact that, what was it like two or three years ago when like basically everybody quit that company because of Sam. And then, and then there was this like board fight and a bunch of board members left. There was a woman on the board then who just did a podcast where basically she sort of out and out said to that Sam lied to the board back then.

[A]

And kind of that controversy was about the fact that. And this is Elon's problem with it or stated problem with it is that OpenAI was originally meant to be a foundation that was going to save the world from AI while developing a type of AI that would be like, helpful. And then all of a sudden it shifted to, well, we have a for profit arm too, because we need to, because we're going to have to fund this technology. And that's totally reasonable. And then it shifted to, actually, most of this is going to be for profit. And not only that, we're now in bed with Microsoft and the true believers who were like, democratize AI for the people. We're like, wait, what the just happened? Microsoft owns a stake. So that power struggle then leads to Sam saying, it's either me running this thing or it's not going to work out. And the board sides with him because you need him, because he's the reason why anybody is investing to Begin with, okay, so that's explicable. What's inexplicable is being in the position that he's in, going on Gerstner's podcast and saying something to the effect of, there are times where I wish we were public so that people could get short and I could burn their asses.

[B]

Yeah. It's like, wait, what?

[A]

That's crazy. That's super defensive. And even if you're taking it personally and that's why you're that way, that's a lot. And then he says to Gerstner, who is arguably among his top five most visible defenders and proponents of him and shareholder, he says, if you don't want your stock, no problem. I guarantee I'll get somebody to buy it from you right now. So people hear that and they're like, whoa, what's going on with this dude personally? That he's all of a sudden. So I am of the belief that where there's smoke, there's fire.

[B]

That part was weird.

[A]

That was super weird. And that tells me that behind the scenes, there's a lot of that going on, and we just saw a little bit of a glimpse of it. What do you think?

[C]

I agree. I mean, I think it was a dickish comment. I think that. But, like, are we out to give awards to these guys for being, like, the. No.

[A]

But here's where it matters. If you're an investor in any of the companies that have just seen a 20% rise in their share price because they, quote, are in a partnership with OpenAI, this matters to the public investors in many of the largest companies in the world.

[C]

Right.

[A]

Including Nvidia, Microsoft, and everyone else who's doing deals with OpenAI as fast as they can. So I think that's why this is such a fascinating situation. We don't have a share price to gauge. Is OpenAI rising or falling in the eyes of the public?

[B]

If it was public, how much does it fall after that comment? 15%?

[A]

Immediately more, or in 2025? Logic. It actually rallies.

[C]

Yeah. These days, yes, probably. Yes. And I mean, the question. I mean, that says more about today's public markets than anything. I mean, I think the bigger issue here is that AI and what's going on with AI is bigger than OpenAI. And so there are forces at work right now where Sam is an interesting player in all of this, but he's just one kind of weird guy.

[B]

He's not just one. He's at the center.

[A]

But it's 13 billion in revenue. Palantir has a $500 billion market cap and is on a $5 billion annual run rate right now.

[B]

And it's 1.4 trillion in commitments.

[A]

Big deal.

[B]

And it's 1.4 in commitments, like open powering everything. And he's acting bizarre and him fighting with Elon. So he tweeted. Sam did. And this is in the middle of all of this. This is the day before Halloween. A tale in three acts. So he shows a picture of. Get him getting a Tesla.

[A]

John, we have. John, we have this.

[B]

Your order is complete. And then he responded, hi, I'd like to cancel my reservation. Could you please refund me the 50k? Which is sort of a weird thing to do anyway. Seems he's just with Elon just to do it. And then it says, address not found. So then Elon tweeted to him, you stole a nonprofit and you forgot to mention Act 4, where this issue was fixed and you received the refund within 24 hours. But that is in your nature.

[A]

And I feel like, Sam, this isn't gentle ribbing these guys.

[B]

No, it's personal. Because also, doesn't it feel like from the shareholder base that Sam is basically copy pasting what Elon did with Tesla?

[C]

Yes. I mean, but then you could say that Elon copied and pasted with Grok, you know, like what Sam did with OpenAI. So I don't know. This is like, boys will be boys. You know, this is like.

[A]

Yeah, but the stakes are like a trillion dollars. That's the thing.

[C]

I grant you. I grant you. Obviously, like you. You know, I'm not trying to make light of the, you know, the fact that, like, mag7 has all these commitments to OpenAI and vice versa. But I, I just think that the, that these guys, you know, in the grand scheme of things, like these markets will roll on like a. The AI. You know, everyone was freaking out over this. The CFO's comments yesterday or whatever about.

[A]

A government backstop, Sarah Fryer, but those weren't her. She did not use backstop.

[B]

This is what she said.

[C]

Right?

[B]

So read what she said.

[A]

Ok, I got it. It's. This is a Bloomberg article. Quote, ChatGPT creator OpenAI, the world's largest private company, is asking the US government to provide loan guarantees for its massive infrastructure expansion that will eventually cost more than $1 trillion. She was at a business conference for the Wall Street Journal, and she. She said, this is where we're looking for an ecosystem of banks, private equity, maybe even government federal loan guarantees would, quote, really drop the cost of the finance again. Oh shit, why even make a loan? How about a grant? Anyway, people flipped out on financial Twitter and then she finished that, that routine by saying IPO is not in the cards right now. Yeah, that won't be up to you. That'll be up to your, your privately held shareholders when they've had enough. Won't be up to. Did. Did finance Twitter flip out too much over this?

[C]

Well, I, I think the, the idea that, oh my gosh, is OpenAI, you know, are they gonna bailed out? Are they gonna get bailed out? You know, with Sam's weird answer on the podcast, it symbolizes that, you know, these guys are like another Enron or something like that. And therefore like we're going to be all as taxpayers on the hook for them. I mean, I just, it's, it's overdone. It's, it's a great company with great engineers like the, like, like to bring it back to Opendoor. You know, Open doors. Opendoor has been around for like 10 years. Right? And so Opendoor had an, had some amazing AI and machine learning people before people were talking about AI even like in the, in the, you know, 2017, 2018, they had rock stars. And they don't today because a lot of them quit. And you know, and I've. And basically there are two places where.

[A]

All the rock stars quit enjoying node Tropic and OpenAI.

[C]

OpenAI and Meta. Basically those are the two companies that have been paying the most. So the rockstar engineers have gone there. So they have amazing people at this company and so a flighty CEO at the top.

[A]

Well, the real concern is now you have some of the biggest publicly traded companies in the country where analysts are baking in orders and revenue coming from these OpenAI commitments. And you have somebody like Brad Gerstner innocently ask something like, how could a company with 13 billion in annual revenue have $1.4 trillion worth of commitments? And then that answer. And then all of a sudden people like, wait a minute, maybe these growth numbers that we're baking in for our public investments are not actually going to materialize.

[B]

It calls everything into question.

[A]

That's the problem.

[C]

I think, you know, if I was going to try to make the case for Open AI though, like, or in Sam's defense, okay, I would say there's never been a company out there that's shown the growth of our company.

[A]

I totally agree with that.

[C]

Like, it's from the moment in like November 2022 when the chat GPT3 came out, like there's all these various Charts that show, like the adoption rate on chat GPT has just been off the charts.

[A]

It makes TikTok look slow, right? It just blows by.

[C]

You know, forget the iPhone, forget all the things Instagram adoption, now what. That thing grew.

[A]

Now what they've done with that momentum is very wise, right? They've made themselves too big to fail in. In AI, Meaning there are so many partnerships now, including with Nvidia, including with, you name it, Apple. There are so many partnerships, so much, so many overlapping deals or bilateral deals. There are whole groups of companies that are working together that nothing can happen to AI without it affecting the whole, I don't want to say house of cards, the foundation of the, of the house that we've built on this theme. And that's the part that's concerned. I mean, it's brilliant on their part.

[C]

Well, and so like, and you say, oh, 1.4 trillion in commitments. Like, like.

[A]

I don't know what that word means, by the way.

[C]

That's what, like. So I think, I think it's supposed to be eight years or something out or so. But the question is like, if, if you are the CEO of this company, like, are you taking your foot off the gas? Anthropic is like breathing down your neck and like Google's coming at you with Gemini.

[B]

What does that mean? Take the foot off the gas, Slowing.

[C]

Down, make those commitments. Like the question, like, take like. Basically the. What finance Twitter is saying is, oh, just take it slow, just go easy, I'll get profitable. Just get profitable first.

[A]

If you believe.

[C]

These companies never get profitable first. They always like go and break neck speed, right?

[A]

If you believe what Satya. So, by the way, so Sam Altman drops off the podcast shortly after that. He's like, I gotta go. And the way, the way Brad was like, okay, no problem. Thanks for being here. It sounded like he knew in advance that he would drop off, but people turned that into a conspiracy, like he couldn't take the heat. I don't believe that. But whatever that was, the interpretation. But the thing about keeping your foot on the gas, if you don't, somebody else will. And there's a lot of money out there waiting to invest in anything that looks like it's winning.

[C]

Right?

[A]

So you're right. I agree with you.

[C]

And I would say that the there, there has never been a platform, if you want to call AI a platform. There hasn't been a platform ship shift at this big, you know, before it's mobile. Like you want to compare the shift from desktop to mobile to this to AI like you're talking about like superhuman intelligence. Right? Like what's the value of like owning that and like sort of being the first to kind of really dominate AGI, whatever. How valuable is that for the US to beat China? How valuable is it for one of the.

[A]

Well, if you look at the CapEx, you can only conclude that the smartest people in the room believe it's the most valuable trophy of all to capture. And some would even take it a step further and say if they don't, they're done. It's. You look at the way Alphabet and Meta are spending on this, it looks existential to them.

[C]

Yeah.

[A]

Like that's the, the only interpretation you could have is that they're betting the company on it because they have to.

[C]

Right. And it, I mean and also the, the interesting thing about those that spending is nobody ever talks about the operating cash flow of these mag 7 and if you. Yes, the capex has been like up and to the right but the cash flow has also been highly correlated with that and leads like the up and to the right, you know, so there's always been a huge buffer of cash flow for these companies. So they're never spending out of their pockets. And these, the folks who are making these decisions at these companies. Someone was telling me like you don't understand like how much like thought and preparation goes into the business cases before they spend billions and billions of dollars in commitments in their budget. So they're not stupid and they know that there is going to be payoffs from these capital commitments to build out these damn.

[A]

Will they all have a payoff or is someone going to lose? Is it a foregone conclusion that Meta's AI strategy is going to pay off?

[C]

Well, I think the biggest risk is going to be that the energy grid can't keep up with the demands. So the data centers will be there, but will the energy be there to kind of power that and that's why there's been such a scramble just in the last year to build nuclear, you know, get Three Mile island going again and all this kind of stuff that.

[B]

Has said that reals is at a $50 billion run rate and thanks to what they're able to do with the compute. But I think there's a bunch of different risks. That's one that there's just a meltdown. We just can't power all these things.

[A]

Or a political risk. The everyone everyone's electricity rising like socialism that would do it in order to support the growth of these data centers in Your neighborhood.

[B]

That would do it.

[A]

That's not popular.

[B]

Another risk is that we hear on one earnings call, oh, the demand is not what we think it is. And these things gap down a million percent. But we're not, we're not close there because they all said on the last call that they're undersupplied. They all said the same thing. So that's probably in the future. But then the third risk and which is coming to fruition this week is, hey, wait a minute, OpenAI is at the center of all of this and there is now doubt about the person leading the company. And also there was this narrative in 2022 and certainly in 23 that Google's in trouble. Like they better and Google stock got killed. And now Gemini is growing faster than OpenAI.

[A]

Let's put that chart up, John. Corporate AI. This is Enterprise large language model market share. So it's the percentage of the market that they're estimating these companies have. And the only, the only two heading higher are Anthropic and Google Meta. I guess that's Llama is falling at least relative to the others. Not falling in. Absolutely.

[B]

And so this is it. If they can't make good on the $1.4 trillion that they've committed to. And obviously all of this is showing up in analysts earnings per share estimates lower.

[A]

Right, Let me share this with you. Deutsche Bank's AI hedge navigating the data center debt surge. Deutsche Bank AG is taking cautious steps to mitigate risks from its burgeoning exposure to the data center sector. I guess they're raising debt for all these buildouts. Okay. Fueled by the explosive growth in artificial intelligence, cloud computing, blah blah, blah, executives at the German banking giant have been discussing strategies such as shorting a basket of AI related stocks or employing derivatives to transfer risk. This is a Financial Times story who would be nothing less than gleeful to see this entire thing crash and burn. We should point that out. What do you, what do you think when you see headlines like that, if that's even 10% true, it's a little concerning.

[C]

Well, like my first question is like what, what are all these AI stocks? Because when I turn on the TV and I see AI is in a bubble like, okay, Nvidia, Broadcom, we know, Palantir, Broadcom, Micron, Micron, Dell, okay, Hewlett Packard. Out of all of those I would like, none of those is in a bubble with respect to its multiple that it's trading at now relative to where it's traded at historically.

[A]

Except for Palantir provided the earnings next year show up.

[C]

Yeah.

[A]

Then we got no problems. I agree.

[C]

But when I last looked at Nvidia, for example, it was trading below the 50th percentile of its 32 times earnings.

[A]

And three years ago it was like 90. Yeah.

[C]

So I think people have been skeptical that Nvidia is going to be able to keep up these, like, multibillion dollar quarters. And so therefore they're ratcheting down their kind of future expectations, which is why their multiple has been, you know, relatively conservative compared to where it's traded at in the past when it was a faster grower. So it's really only Palantir. You know, I love Palantir. I love Alex Carp.

[A]

Yeah, what do you know?

[C]

I missed. I missed it.

[A]

I missed a problem with this.

[C]

I give, I tip my cap to Dan Ives for Navy seals coming through the window. But last I looked, trades at 86 times next year's revenues.

[A]

You will take it and you will like it in this room. We believe in America.

[C]

So I think Michael Burry has, you know, for some reason he gets lauded as this like, brilliant guy because he was on the big short and everybody reports his puts on his latest 13F, but nobody ever goes back like six months later and says, oh yeah, remember all these puts he bought, like they expired, like worthless and all this.

[A]

Well, he does admit, he does say things like I was wrong like that, go to cash call or whatever, sell one word, tweet, sell. He owned it. One of the thread boys was pointing out that, like, for the last four years or whatever it is, his 13, his 13 Fs have been coming out perfectly within a 24 hour window of the same date, quarter after quarter after quarter after quarter. This one happened like 10 days early and coincided with the earnings call for Palantir. Almost like, by the way, before this thing reports, you should know that I own puts right. You think he's sending a message in the timing of his 13 Fs or have we all just been, like, eating too many of these mushroom chocolates and we all need to calm down?

[C]

I, I think we're, Yeah, I think we're all getting a little too hyper. It's too much hyper focused on these, like, you know, what, what, what color was, you know, his pee when he, you know, got up in the morning or something?

[A]

I agree with that. There are people comparing the behavior of Sam Altman in recent days and weeks to Sam bankman Fried in 2020 or 2021. That seems a little extreme too. I would say, but, like, this is the mood out there. There's a lot of people that want to see this thing either because they missed.

[C]

I think it's super bullish, to be honest, when I hear all that angst and concern.

[A]

They acted that way with Elon, too.

[C]

Yeah. So, like, remember the world was going to end because Elon calls a guy a pedo guy and then. And then world was going to end because he, you know, he sort of made these comments about Bob Iger, you know, like, go f yourself and all this kind of stuff. So, you know, and yet we all went back and we bought Tesla again. You know, it's like. So I just think, like, you know, the market rolls on, you know, that's.

[A]

A really good point. And it ties into what you are doing now. The investor class is not precious about the norms and traditions that we grew up with in the 80s, 90s, 2000s, 2000s. Like the investor class now. They love seeing the leadership of these companies acting as unconventionally as possible, telling people to go themselves if they don't agree. It's almost like a version of pro wrestling. And we're not precious about. Well, in my day, a CEO would never act like that. Well, it's not your day. It's a new day. The audience for these antics is 27 years old. They're on Robinhood. They're plowing money into their account every week. They're buying options. They love this shit. It's a spectator sport. So you can fight that tide or you can stay completely out of it or you can lean into it. Eric Jackson has chosen to lean into it. Tell us about your midlife crisis. How did it start? And are you having as much fun as it looks like you're having? The stocks are working, so that's good. But, like, what's. What's. What's going on with Eric Jackson?

[C]

I think the midlife crisis actually started here in this room. We did it three years ago or whatever when you guys asked me to. In the middle, it was June 2022, and you guys asked me to say, like, you were talking about, oh, will tech ever come back? Because the. Things are so bad. We thought. We thought us, you know, like, what.

[B]

Was the title of the show? Is it. Is this as Bad as it Gets?

[C]

Yeah, yeah, something like that.

[B]

So you pitched Open Door Dun Duncan.

[A]

Look it up. I want to know.

[B]

Open Door in car.

[C]

You. Well, I think you said, you know, give us name, names, name, names. Eric, Name of a stock that's coming back from the Dead. One of these, like, left for dead companies.

[A]

Okay.

[C]

And so I said, well, I got two. And I mentioned Carvana and Open Door, and. And I gave the reasons why. Very similar businesses. And one's going after cars and one's going after homes and all this kind of stuff. And I don't know if you can pull up that chart that shows, like, for the next six months after that podcast.

[B]

John, let's roll.

[C]

I didn't. I did not see that until, like, this morning.

[B]

Your.

[A]

Your Carvana call on this show was one of the best. Like Babe Ruth. Point, point, point at the stands. That was one of the best calls I've ever seen.

[C]

No, not for the first six months.

[B]

That was.

[A]

No, it wasn't. How much did the stock go up from that day? I know. You know.

[B]

Can I present the case?

[A]

Yeah.

[B]

All right. Charts on.

[A]

By the way, why is it 700 degrees in here? You guys doing that on purpose? I'm shedding a layer. So get the cold. Get the cold to lower the.

[B]

So, yes, it was a legendary call. Carvana is up 13, 1200 percent since. John, let's roll through some charts, please. So you pitched this on June 17, 2022.

[C]

Looks great if, like, on the big picture.

[B]

So these. These stocks were in massive.

[A]

The red line is Eric.

[C]

Yeah, the red lines, the podcast.

[B]

Massive. Massive drawdown. So nobody wanted anything to do with these names. Next chart, please. And then ever since we know what happened, Carvana's up 1200%. Opendoor had a rocky road, but let's zoom in a little bit. So, Josh, that Eric called the shot is one of the greatest calls of all time. And actually not even close.

[A]

No greatest close I've ever seen, personally.

[B]

Really? Because after Eric said that these stocks fell 90 and 80%.

[A]

Have to have patience as an investor. I tell you this all the time.

[C]

I've. I would have. I tried. I've tried that line with my own hedge fund investors, so. And you know, nobody cares when you're 90%.

[B]

So Eric called Carvana, which was 100 bagger, but right after he came on, it fell another 80%. 90%. Excuse me. Open or fell another 80. So you absolutely nailed it. Sort of.

[C]

No, no, no. So the episode was called it can't really get Worse.

[B]

Oh, it got. It got 90% worse.

[A]

It got. It got worse.

[C]

Wait a minute.

[A]

So this is important, though. You didn't buy all your stock in Carvana and then, come on the show. You probably bought that dip. This is what it means to be an investor.

[C]

Dip.

[A]

If you like. Us, if you like a stock, it was at $2 at the time.

[C]

No, when we were on, I think it was $20 or something. Carvana.

[B]

And it went down to 2.

[C]

It went down to 350 was the low.

[A]

Yeah. Your average cost, if you're able, it.

[C]

Had been at 400.

[A]

Right.

[C]

It came all the way down to $3.50 in December 22nd and then it's come all the way back to 400.

[B]

It's unbelievable.

[A]

So was it the best performing stock of last year?

[C]

For several years, like and several years. And, and, but what was. What's like so incredible. So what happened is I knew this stock. I knew Carvana. We're talking about Carvana first and then we'll go to opener. I, I knew I traded Carvana well because like in the years prior to Covid, I'd been like a small mid cap like growth tech Investor and Carvana IPO in I think 2016 or something like that. So it was a go go stock. Like Wall street didn't care. It was like balls to the wall. You know, keep building these bubble gum machines by the interstates. Don't, don't run it for profitability, just run it for growth. And they, they were obliging and the stock did. That's how they went from like 15.

[A]

Bucks to 0% interest rate. Era. That was the logic, right? Yeah, yeah.

[C]

But what was interesting to me in 2022 when the stock was collapsing is that the CEO, Ernie Jr. Ernie Garcia Jr. He bought $70 million of his own stock that year. 7 0. And so like one in a tranche in like March of that year when it was like a lot, I think it was like 50 bucks at the time. And then another, another tranche around June when we had that podcast around like $20 million.

[B]

He followed you into his own stock.

[C]

But then, but then later on in the year, around Thanksgiving that year, there were two guys. One was the chief product officer, another like another junior management team guy. One bought 3 1/2 million dollars worth of stock at $7.50 and the other guy bought about, I don't know, 700k worth of stock. But you, you never like, you see token, like CEOs token buying their own stock at the lows. Like Michael Dell, like he bought Dell and they're billionaires.

[A]

Right. It almost doesn't matter.

[C]

You never see like a, like a chief product officer rank and file, three and a half million dollars worth of stock.

[B]

Yeah. Where do you get that money from?

[C]

Because like, like probably 98% of his wealth is tied up in the stock already through RSUs and all this kind of stuff. And so he's, you know. So it turns out that guy was a Canadian guy. He followed me on Twitter. Dan Gill's his name. And so, like, I reached out to him in January of 23, and I was like, hey, can we chat and stuff? So I called him up and I said, hey, you know, Dan, I gotta be honest with you. Like, I look at a lot of, like, insider filings. You never see, like, people like you, with respect, you know, spending three and a half million dollars on their own stock. Especially, like a battleground stock like Carvana, like. And he was like, oh, shucks. You know, like, I'm just, you know, I. We. We've got a tough road ahead of us. It's not guaranteed, but we really believe in each other. We all went to Stanford together, so we know each other on the management team and all this kind of stuff. And I said, like, I said, to be honest, I don't know if I have. I had that conversation with my wife, like, I'm the chief product officer for Carvana, and like, hey, honey, let's take three and a half million out of the ira. We're going to roll it into more Carvana, okay? Because I really believe in Ernie and the team. And we've got this. You know, to be honest, I don't know if my wife would have been okay signing all of that sprinkles out.

[A]

That's a high. No way. That's a high. She said she's like, wait, you work there? No, that's a high level of conviction. Why was that stock of $2.

[C]

What are people.

[A]

The people think it was a fraud.

[C]

I'd go on these TV shows where I'd debate, like, the Wall street analysts covering it. And I was like, hey, you know Johnny from Wedbush or whatever. Like, how'd you come up? I'd say this off air. I wouldn't say this on air. It's like, how'd you come up with your 20 target? You're basically saying, like, you think as a running company this should be worth 40, but there's a risk that it might go bankrupt and therefore go to zero. So you just pick 20? Yeah, it's like, yeah, basically, that's how.

[A]

My God. So, but what are the bears that.

[C]

What?

[A]

What? The person that sold it at $3 must have thought it's going to zero, right?

[C]

It's going to file for bankruptcy.

[A]

So that was the issue up with their debt. Debt.

[C]

They had too much debt from building.

[A]

All the rates were rising.

[C]

Their rates were rising. Who's going to buy a car from the service? This, this service is dead. And yet you talk to people that use Carvana and they loved it. Even at $3.50 where you know, they didn't care about the stock price, they actually loved the service. So that's. So I didn't get in right away. I was still like working away. I, I had a big, I had a billionaire like in who was an investor in my fund who pulled out at the end of 22 after like I had two years of bad performance. Sam Alban. And, and I was like, and he was like 99% of my A. And so I was like, oh my God, you know, like, like. And I had all these like lawyers and Cayman's directors and people I was paying money, like a lot of money to saying, Eric, you just gotta shut, shut the firm. You know, it's like not worth it.

[A]

Like gotta stop doing this.

[C]

He's all, he was all your funds. And now you've had like these bad 21 and 22 years. The way that you do it in the hedge fund world just shut down and then like six months later and you don't have to show it anymore. And so, and nobody.

[A]

Well, you don't have to worry about a high watermark because it's a brand new.

[B]

Right.

[A]

You're never going to hit a high water mark back when you're down enough.

[C]

Yeah, but I didn't even care about that. And I just said, you know what? The whole thing's paid for. And I don't know, I just did it. Didn't feel right wanting to shut this. Although I didn't feel great thinking like, what the heck am I going to do with the rest of my life, you know, and how did I get here? Am I going to be able to keep paying for my kids schools and all this kind of stuff?

[A]

This stock resurrected you, is that too much or is that about right?

[C]

Yeah, I mean I got to work on building like the little AI team within the company. And one, the first iteration of the first model that they built. These guys come to me and they.

[A]

Find me the next Carvine right now.

[C]

They said in May 23, they said, okay, I ran the numbers boss, you know, and okay, like show me the list of like what the model says, you know, should be my, you know, top 10 positions in my portfolio. And number two on the list in terms of size was Carvana at 11 bucks a share at that time. And I was like, are you sure about this? Can you check your numbers again? Can you take this back and just humor me? Because I don't want to sort of jump both feet in and find out later. Two weeks. You were like, oops, we didn't update the simulator and this and that and all this. And so it took him a week. He comes back and he's like, no, it's. It's. It's good. Yeah. You know, I think you should really buy it. By. By that time, it was like 15 bucks. And that's. That's one of the most interesting things about these hundred baggers is that they get priced basically as if they're going out of business, but when they start moving up, it's violent, you know, especially.

[A]

With a lot of shorts.

[C]

So. So this went from like $3.50 in December of that of 22 to by June, it was like 25 bucks. It was over 25 bucks. So. And it was just a combination of, like, oh, the earnings weren't so bad. Like, they weren't great, but they weren't terrible.

[B]

Why don't you sell at that point? Where's the conviction coming from?

[C]

Well, so I got in. So I trusted the model and got in at 15. And so then. And then I, you know, stayed with it, and I, you know, the models kept saying, no, stick with it, Stick with it. But between 15 and 150 bucks, with Carvana, there were three separate times where it had major drawdowns. There was one 66% drawdown that it had in the middle. And so, like, this was like a major.

[A]

You rode through that with a full position.

[C]

I kept it and that it drew down in 10 days, it went from, like, 88 bucks to, like, 42 bucks. Like, no news. There was no news. I mean, I don't know. There's just, like, macro stuff. Or maybe Sam Alton said something and pissed the markets off or something. And so. But then when I. So I just decided, like, I'm gonna stick with it. And. But at 150, I started having this voice in the back of my head. Like, the billionaire who used to have money with me, he had, like, some Swedish guy who was like his chief investment officer who worked at his family office, right? And so he would always be on my case, like, eric, why don't you take a profit when it stock two X's or three X's that's not good enough for you. Like, you need a 5x to sell.

[A]

Like a 10x100x motherfucker.

[C]

Like, and that's the mentality like that we're all sort of taught growing up. It's like it's all about batting average. It's like just to eke out a gain over the market. Like you don't just sort of like, hey, I'm gonna like roll the dice and just sort of, you know, let it all hang out and stuff. Like, like some of these people like that you hear about in trading crypto or something. And so I, but at 150, it was too much. I was like, I'm sitting on a 10 bagger. I know this guy with be like all over my, my, my ass saying like, I gotta sell this thing. So I, I just. But Even then at 150, I, I sh. I shit you not. I believed that this thing was going to go to 400 bucks. And. But I said to myself, this thing is volatile. And so I'm so smart. I was the guy who like got into Carvon early. So I'll just like trade it. Like I'll, I'll just sell it, sell at 180, buy it back at 130.

[A]

Fantasy that everyone thinks they're going to do.

[C]

And honestly, like, if you added up all the trades from like 150 to, to 400, I'm sure I lost money on all those trades.

[B]

That doesn't work.

[C]

And so, but it did go, it.

[A]

Ultimately did go to 400, which is.

[C]

What it's pulled back. It's now 300, but still a great company. I don't, I don't, I don't own a position in it now. So. But then earlier this year, like my, the midlife crisis is like, I'm paying for all these AI guys. And they were like building all kinds of models, option models, crypto models, you know, earnings models and all this. And I was like, guys, like, I'm not like a billionaire myself here, you know, Like, I can't keep funding this thing. Thing out of my.

[A]

You're not looking for experiments. You're apply. Applied AI guys.

[C]

Let's just pick, you know, two models that seem like they're going to work okay. And like, like it looks like the Carvana model had something there. So let's just try to find 100 baggers. Let's do that in the hedge fund. And then the other thing that worked was the crypto models. So that's what we're going to do with this sort of gen 2 crypto dat thing, which we can talk about later. EMJ, we'll skip, we'll skip the Crypto.

[A]

For this week because I want to get to some of your new ideas.

[C]

So Open Door was.

[A]

Well, let's start. Let's start with Open Door. So this is an idea that is currently in motion. Like, it's not early, or you think it's early, but it's already gone up a lot. You're already right. So you sent it. What was the, what was the tweet that he said at 88 cents?

[C]

I don't know.

[B]

You tell us. What was it?

[C]

Well, I get it. I just wrote out like it was something like eight or nine threads.

[A]

You said this. You said $82.

[C]

Yeah, that was the Babe Ruth call. My call, my shot moment. I was like, this thing is going to go to 82 bucks a share.

[A]

Let's just start with reaction. You have people that know you at that point, but you have a lot more people that know you now. Right, but then you have people like me who know you from your past life as a very buttoned up activist investor. No, but you're, you're a guy. Like, you're a legit guy. So I've never seen you do anything like that. Be like this. 80 cent stocks going to $82. I think people thought maybe that you were hacked. People that know you for a long time know you're like just an all around good guy, calm. That's the midlife crisis part to me. I'm like, oh, this guy's lost his mind.

[C]

Oh, yeah, no, I got DMs from.

[A]

Like, all right, so I'm not the.

[C]

Only one that Adam Furstein from who used to Write@the Street.com Scam Buster of Biotech stuff. He's like, honestly, Eric, are you okay? Are you okay?

[B]

Yeah.

[C]

Honestly, like, I just, I don't, I don't, I don't want to pry. I don't want to pry, but like, seriously, I'm. I want to check in on you.

[A]

Did Herb Greenberg come out, come at you?

[C]

No.

[A]

Okay.

[C]

No, I didn't hear from her, but I heard her from lots of people, obviously. Lots of, Lots of hate. Lots. People thought it was crazy and thought it was ridiculous. And I had. So I had no, I had no shame. No.

[B]

I thought the stock was going to work. But I honestly do think it is crazy because I buying you know a lot more about it than I do at this point, but I feel like it had. It was an experiment that failed. Now, granted, it was in the absolute worst possible environment. I buying in a housing bubble, probably not a great business.

[A]

We found out But Izillo threw in the towel.

[B]

But I think we also learned, but didn't we also learn that kind of need people involved? Because I remember vividly one story that came out was some dude who's like, this house next to me, there's a gigantic barking dog in the backyard. Neighbor. And nobody, this house was on the market for three years because everybody knows that the neighbor's dog is impossible, will never stop barking. And Opendoor came in and bought it and sold it a year later for $100,000, whatever the case was. And it was like, yeah, you kind of need people to do this. So why do you think that this is a business model that makes sense in the real world?

[C]

Well, like, so why I did all those things is like a combination of just like my own mistakes from the past. And so like learning from the mistake of not owning enough Carvana and not getting into Carvana early enough. Not, not calling my shot with Carvana. Well, I, I mean, I guess I did, but I wasn't very precise on this podcast. I didn't say Carvana was going to go back to $400. And I, I, I mean the two models of Carvana and Opendoor were, were very similar. So Carvana doesn't make most of its money from buying and selling cars. It's like I, I buying for cars. They don't make money from that. They make money from finance and interest 80% plus of their EBITDA margin that they have today.

[A]

There are a lot of great stocks that are just like that type of thing.

[C]

So yeah, I always believed, and it was part of the original tweet thesis for open doors. Like they got to do mortgage and title, you know, for sure. Like that's where they're going to make their money. There's a reason why there's two, two guys who own NBA teams, who run mortgage companies.

[A]

United Wholesale Mortgage, which is Mattish bia.

[C]

Yeah.

[A]

And then Dan Gilbert, Rocket, which I'm long Right. You probably think that Open Door is going to compete with Rocket. Is that part of your thesis?

[C]

I think Rocket's a great company.

[A]

Will rock you.

[C]

I think I have another company better that's more of a direct competitor to Rocket. But Rocket, I mean, I mean the reason to be bullish on mortgage companies and the housing market and American housing.

[A]

Is the worst environment ever right now. How could it get worse?

[C]

We're at the beginning of the rate cut cycle. You know, it's a huge market, Rocket, as big as you think of it as this gorilla. It's only got a 6% market share.

[A]

Like compete with every bank in the country, for starters.

[C]

So there's an opportunity for, for everybody at the table to kind of get in there and, and, and these guys, you know.

[A]

But tell me more about what you just said. Opendoor scores the same on your model as Carvana did. I'm not saying give up, give us the whole AI formula, but like what are the important things? If you're out there looking for 100 baggers, what are the things that you're looking for?

[C]

Well, there's, there's a bunch of technical things you can look for. So there are signs of capitulation in the stock and just seller exhaustion and things like that. And there's signs like getting above a certain moving average that makes sense for that particular stock, you know, which tells.

[A]

You the, the narrative has changed amongst investors, right? Yeah.

[C]

From a fundamental perspective, there's a major RE rating that happens when companies go from money losers to money makers. And so people thought that Carvana was going to go bankrupt. Right. Because they couldn't make money and they couldn't keep up with their debt. And then suddenly they were able to shift and show that, oh, we can make like a decent EBITDA margins here.

[A]

That forces bears to say to reevaluate whether or not they want to stay on the short side.

[C]

Right.

[A]

And then that alone could trigger upside momentum which attracts new investors.

[C]

Yeah. And now short covering is another factor that you would look at. Like everybody, like all loves to, you know, go through all the most shorted stocks. And just because a stock is heavily shorted doesn't necessarily.

[A]

For good reason, many with good reasons.

[B]

Open door reports in five minutes. And by God, I really hope this doesn't get awkward. I swear to God, if this gap's down 30%, I'm going to feel, I'm just going to, I'm just going to leave and feel very bad. But how are they doing fundamentally? Like I know it's very, very early. The CEO just left. We're going to hear from the new one. Is this a viable company?

[C]

For sure it's viable. Yeah. No, they just, so they just. The seat. The guy who was COO at Shopify who like a $200 billion, I think we would all legit company. Right. He. So basically he had to do nothing for the next year or two and probably Toby Lutke, who's the founder CEO is going to bump up to chairman and somebody is going to get elevated to CEO of that company and make a lot more money. He willingly Left, even though he had this stellar reputation to become the CEO of Opendoor. A $3 billion.

[A]

How much stock did they have to give him?

[C]

They gave him Elon type.

[A]

But that's good, though, if you're a shareholder.

[C]

82 million shares fully unlocked to him, which wasn't a coincidence because 82 was my price target for it.

[A]

Okay, you're. You're in communication with the board of directors now. They're taking you seriously? They've been for a while.

[C]

Yeah.

[A]

Okay, how. How long did it take for you to break through and be like, guys, I'm building the open army. You need to have me in your corner?

[C]

Well, Adam Bain, who used to run sales at Twitter, do you remember?

[A]

We know Adam.

[C]

He's on the board. And so I think the same day that I sent that Tweet out on July 14th with my, like, $82 price target, Adam sent me a DM saying, Come on, really? You know, like, he couldn't believe it. Like, I love.

[A]

I love Adam, by the way. Super nice guy.

[C]

So. And. And then it was like a couple weeks later, and he sees the stock moving up so much. Like, it was 10 days after that first tweet where the. The stock got halted because it traded three times its float on one day. Like, and. And they just halted it for like 13 minutes. It went from like, it had gone from like 51 cents at the end of June to, I think it was like, got halted almost touching five bucks in late late July.

[A]

This type of shareholder grassroots mania starting on social media, like, it's effective. And I feel like companies that have nothing left to lose because their share price is trading under $5, they're now actively embracing. They're cultivating this. So if a shareholder comes along and wants to get really vocal and whip up a frenzy about a stock again back to, we're not precious anymore. Historically, the board of directors would be like, shh, don't encourage it. Right now. We just saw Hertz save its own life. We saw AMC save its own life by cultivating this type of investor frenzy. So it's now it's a two way street. It's not just a thing that's happening to companies. It's a thing that companies are actively participating in.

[C]

I could tell the old CEO, she wasn't used to it. She was from that old school, right? She was like, was just, I'm just gonna ignore this guy. And then she couldn't do that for so long. And the board initially was like, no way we're engaging with this. And then they've obviously totally come around. And now everybody since at these other companies that I've taken positions in, like, better or some of these others, like, they've been very.

[A]

Eric's buying.

[C]

Yeah, they're like, hey, you know, like. Like, we love you, and, like, we want to support the retail and we're gonna do video calls and that Opendoor's doing a video call today. Just like Balantir.

[A]

Eric Jackson organized a breakdancing competition to save the rec center. Everyone's very excited when you're. So now you're in the mix. No, I think it's. I think it's cool.

[C]

Well, now the question is. And you guys talked about this on a previous show, is it a meme stock or is it a.

[A]

No, no, no. That's not the question is.

[B]

It's called stock.

[A]

Your question is two. Twofold. Do you get nervous that somebody will look at this and say, this doesn't look kosher to me. This guy's long the stock and being extremely vocal about it on social media. I'm not saying what you're doing, by the way. I draw no distinction between that and somebody getting on stage at Iris OWN conference just because they're wearing a suit and. And saying, this $20 stock should be 100.

[C]

Why.

[A]

Why is that? Okay? But doing it on Twitter is not. So I. I like it, and if it makes people money, great. But the dark side of this is if something goes wrong, you kind of become forever associated with. For better or for worse.

[C]

Yeah, yeah. No, I had a meeting this morning with some guy in Hudson Yards who, like, he's anonymous on Twitter, so we, like, met him in person. He's sort of famous because he tweets out these photos of his open portfolio. He's gone in one of his portfolios. He's full, port open, and it's like, seven. He showed it to me this morning. I think it's, like, how much money.

[A]

Did you make him?

[C]

Well, it's a $17 million portfolio. He was in it before I tweeted about it, but he's very happy. But he was saying to me, he said, man, I just don't know if I could have done what you. You did, where you just, like, stick your name out there. You know, what if you were wrong? Like, what if.

[A]

So what.

[C]

What if? Like. I mean, you just go back to.

[A]

Canada and pretend that happened.

[C]

Like, I. I've gone through so much crap in the last few years. Like, you look at that chart, like, I've had, like, big drawdowns in my hedge fund. I had this billionaire like turn his back on me and walk away. You know, I'd gone through like this like internal crisis and stuff. So like when people say like, oh, how do you have the gall to self respect to stand in front of Drake's house making a video talking about Opendoor, like, you know, I just don't care. Like, you know, like I believe in opendoor. I believe in kind of like the types of philosophies that I'm advocating. You know, I've been amazed with like all the. It's predominantly been like middle class people who are in the open army and they're from like, I would say it's like 70% are outside the US all over the world.

[A]

The open army are people who have bought the stock and get it, are willing to celebrate the company on social media with each other. That's it. It's nothing more.

[C]

It's nothing more than it's a new version of Gamestop. You know, it's a retail group but they, but they, you know, they are much smarter than what you typically kind of get, you know, get vibes from Wall street towards retail about.

[A]

It's slightly more cerebral than GameStop. It's taking place more on X, is on Reddit is my understanding. Oh yeah, ok.

[C]

There's a lot of weirdos on Reddit now and Twitter.

[A]

I love Reddit.

[B]

No weirdos on Twitter. Imagine this thing peaks at $81.

[A]

You know, Reddit's got weirdos. Twitter has people who will like physically harm you in real life if you disagree with them on, on something political. Do you sell them merch? Like how organized is the open army? No, I do have a newsletter that they're subscribing to or how do you communicate to them other than through tweets?

[C]

I haven't telepathically. I am, I am. You know, I actually just had a zoom with Phil Pearlman who's gonna help me start a newsletter. Cause I haven't had a newsletter. I haven't been monetizing this. I have a headshot.

[A]

Can I do my Phil impression? Yeah, genius, bro. Like you do the letter. Yeah, of course you do the letter.

[C]

He's like, eric, I love it. You're authentic. You've tapped into something with this rising dynasty and you're just gonna ride it. Okay. Cuz it's you.

[A]

You shout out to Dr. Phil.

[B]

So what about, what about these people that you say they're mostly middle class? Are you like, listen, I'm as enthusiastic as they Possibly could be, but. And also be responsible.

[C]

Yeah, for sure. Like, so I started doing this Drake series, right? Like these daily videos in front of Drake. Yes.

[A]

So what for the people that are totally mystified by. We keep saying, Drake, what are you doing?

[C]

So my 16 year old in the summer, he's like, dad, you're always like talking about how you think opens is great stuff, doc. His Name's Julian. He's 16. He's grade 12. Wants. His dream is to get like a D1 scholarship.

[A]

We have a son the same age. Okay.

[C]

And he said, but like, most people don't watch cnbc. They don't watch Bloomberg and stuff. Like, so, like, how are you going to reach those people?

[B]

I don't.

[C]

No idea. He's like, well, why don't you do like a video in front of Drake's house?

[A]

And I thought, viral, Dad.

[C]

I thought he meant like a one time. Like, you know, go take a selfie or do a little video. Hey, I'm Eric Jackson. In front of Drake's house. Yeah. I was like, yeah, great idea, Julian. You want to come over, be my cameraman and stuff? He's like, no, no, you gotta. You gotta do it like every day until he buys open stock. I was like, what? He's like, yeah, no, yeah, it's. That's the only way it can be viral. I was like, what? Even weekends? Like, oh, yeah, even weekends too. Like, how long? Well, it's open ended. That's why people will tune in because they'll be like, you know, intrigued. It'll be like the Truman show and.

[A]

They'Re gonna want to see it and they're gonna want to see it happen. Right, right.

[C]

So I said, okay, I'm up for it. So we go over there, we start filming these videos. Usually only like 3, 4 minutes in front of his house. He said, hey, I got a whiteboard, dad. You know, we have pictures. John, hold it, hold it up. And you know, day one, day two, so, yeah, so Drake's house, day one, pretty nice house. Gonna keep coming back until Drake buys one chair.

[A]

Look like such a nerd in this.

[C]

A drink Sunday, it goes on. Not for you. You're about to play a show in Copenhagen. No rest for us over here. Been up since three doing some analysis on Open Door. All right, day 19, Drake back here. First of all, I want to say I've never seen this Comp merch. Day 35 back here at Drake's. Had a big race. Yeah, I got a microphone here. People complained. I can't hear you. Day 80. Day 80.

[B]

Oh, my God. This is, this, this hold.

[A]

We love you.

[C]

This is. I. I love that. I love that he has a pay phone in front of his house. Isn't that cool?

[A]

The British, like the red pay phone?

[C]

No, it's a Canadian. I don't know. Anyway, so, I mean, this thing, I don't know, it's got like 10 million impressions across all the different videos. And so I feel a certain pressure to get to your point, Michael. Like, you know, like you, you get all kinds of weirdos sending you messages saying, like, I put all my money into Open Door and stuff like that. I don't know if that's what I would advise. You should talk to your financial advisor and all that. But some people are really into it and excited about it. And you do feel a sense of responsibility, obviously.

[B]

I would hope so. And that would be weird if you didn't.

[C]

And the other thing that you feel is like, how do you keep it fresh if you're talking there every day? Oh, he didn't buy any shares today, so check back tomorrow.

[A]

You have his bodyguard bought stock.

[C]

Yeah. So on day 10, we went over at like 8:30 at night. It was dark and like in the middle of the video, the payphone, by the way, turns purple at nights, which is really cool. If Open door goes to 82, I'm definitely getting a payphone that turns purple in front of my house for sure. So this guy comes out of the bushes, you know, and at first I thought he was gonna, hey, stop recording. Get outta here, guys. He let me finish and then like he comes over and he's like, guys, what's going on here? We've been watching you for the last 10 days on the security camera. I was, what, you're talking about stocks or something? And I was like, well, no, it's actually one stock in particular. And I whipped out Yahoo Finance. And I was like, it's called Opendoor. And I was a hedge fund manager who was early into Carvana and it 100x and we think like, Opendoor can 100x. And his name's Bucky. He's like 100x. So if I put 10,000 bucks in this stock, it could 100x. Yeah, Bucky, if you did that. And I was right, and it goes to 100x, you'd be worth a million bucks you're investing. Maybe. He's like, I'm buying this thing on Monday morning. Where does this thing trade and all this kind of stuff? So anyway, he's a great guy.

[A]

He owns stock, goes open. You're never going in front of that house again.

[C]

He owns better. He owns open. And so he said to me, like, he's like, you know, the guy you got to talk to here is Future. I was like, future Drake's manager. He's like, yeah, Future's Drake's business manager. He does all his OVO stuff and anything. Business is him. So I'm gonna hook you up. But he's. Drake's in Europe right now. He's on tour for the next two months or something. So I still haven't met Future. I called, I was texting with Bucky a couple weeks ago, and he's like, oh, man, they just went to the Bahamas. I think they all travel, like as an entourage or something. And so he's like, but don't, you know, don't worry. Trust me, I'm gonna get them.

[A]

I got the cheat code for you. You have to get in touch with Bobby Altoff. She gets these one on one interviews with him. They just did another one. It was equal.

[C]

They were in bed together.

[A]

It was as pointless as the one before. But maybe more pointless is get her to buy the stock because he follows her.

[C]

Right.

[A]

So you got to think about it orthogonally. Am I saying that right word?

[B]

I, you know, I refuse to learn what that word means. I hate that word.

[A]

Orthogonal to Drake are the people that, you know, have some way of being in Drake's eye. And so I would think about, like, where do you see him dropping likes? Or where do you see him? Actually, he doesn't do a lot of media, which the. I think the. The last mystique left about him at this point.

[C]

Right.

[A]

But he does, he does her show for God knows what reason. I want to ask you about some of your new investing ideas. And we don't have a million hours to spend on these. And I want people to follow you so they can learn more about them. So we'll do like a mini lightning round. But before we do, are these all potential hundred baggers or. Not necessarily.

[C]

Yeah. I mean, I don't everyone.

[A]

You buy something now.

[C]

Nothing goes into my portfolio that I don't feel has the. That's possibility. That's that there now it could be four years, could be five years.

[A]

Your head.

[B]

I mean, that's one word to describe it.

[A]

Why aren't you. Why aren't you an active ETF at this point?

[C]

I don't know. People have asked me that.

[A]

Dan Ives hit a billion the other day.

[C]

Yeah.

[A]

Where's Tom Lee? Two Billion.

[C]

Yeah, he must be with.

[A]

Okay, you telling me you couldn't have $500 million under management with a strategy like this? If everyone just says, I'm putting a grand in, let's see if Eric can turn it into 100 grand.

[C]

Right.

[A]

I'm just saying.

[C]

Yeah, no, there's a. There's a big. There's a big retail following.

[A]

All right, here's your stocks. We did open door today. Death better betr, right? What is this?

[C]

Well, actually, I think this is going to be the poster child for why AI is not a bubble. So they are a mortgage originator. And if you've ever heard of them, you probably heard that the CEO was the guy who fired a thousand people on the Zoom.

[A]

I remember that social, that social clip.

[C]

And so it became like a DEI thing, like, oh, you're radioactive, ruthless Wall Street CEO didn't care. All these. Well, the truth was better. You know, mortgage originator went from a $55 billion a year run rate at the beginning of 2021 for mortgages that they were originating to 5 billion by December of 2021 after the rate hikes. So if your business drops like 90%, like, you are going to need to like, cut costs. You don't. He had a thousand people in India that were basically pushing paper around in order to send out commitment letters so people could, you know, get mortgage offers from.

[A]

So he made that. He made the company untouchable, which is why it sells off.

[C]

So. And then it took a while for them to spack because, like, they got slow rolled at the SEC because they thought it was a DEI kind of issue and stuff.

[A]

Oh, it was in public debt.

[C]

Yeah, it wasn't public yet. Didn't even. Anyway, the stock immediately sold off. SoftBank owns like 17% of it because they thought it was going to be like the next big thing in mortgages. They had started 10 years ago building an AI team to kind of automate the whole process. But in 2021, it was still too early. They still had to rely on humans. And the funny thing is, when I started doing the research that year, in 21, they could have done over $240 billion worth of originations, but they just physically didn't have the people to push the paper around to do that. So anyway, they fired all those people. They decided to kind of refocus on AI. The guy who actually built their original matching algorithm, at best better was the guy who built the Spotify music matching algorithm. And that still is. He's responsible for 82% of the code that still runs at Spotify. But he, he, he came to better to kind of build this mortgage matching algorithm. Now they're ready for prime time. They've, they've. And they don't need all those people that they used to employ before.

[A]

All right, so it's a working business. It's not a, it's not a pipe dream. It exists.

[C]

It's a, it, it exists. It's like a, a player.

[A]

How much revenue they do and what.

[C]

We'Re going to see, like their earnings are next week. We'll see. Did like, just like we saw with Rocket a couple weeks ago or whenever they had earnings. Does a little blip down in mortgage rates translate immediately into increased volumes? And so thinking ahead, like, what might this business look like in a year or two years?

[A]

How much revenue do they do now?

[C]

Right now they're something like. I'm trying to think of their market share. You don't know if 2.6% I think national market share is, but I don't know what their revenue is, is. But they're, they're, they're one of the, they just got forgotten about as, as a, as a spac. Okay. And so like they basically now have to prove that, you know, they don't need these people to kind of.

[A]

That they have a mousetrap and it's automated and it works.

[C]

Yeah. Okay.

[A]

Every time I turn on CNBC and I see the ticker going by the bottom, I see this Irene stock, I still haven't bothered to learn what it is. I know people have made a ton of money in it and I know it's like one of the most actively traded names on Robinhood. What the hell is Iron?

[C]

So Iron and Cypher, you probably heard of Core Weave because Core Weave is.

[A]

Sort of Iris Energy or not.

[C]

That was their original name and now they sort of just go by Iron. Okay. So Core Weave has been one of the most successful IPOs just in the last year. They IPO'd like last March, and they were seen as another AI play, data center play. But the funny.

[A]

I knew that one was going to work because of how bearish I was on it.

[C]

Came out at 40, went to like 160 or something.

[B]

I was about to look at you so sideways.

[A]

Yeah, no, I knew it would work because I hated it. All right, so what is this?

[C]

But what's interesting about them is that they're sort of like a middleware player stuck between the metas and the Googles, the hyperscalers on of top. But they actually don't own any of the data centers themselves. Core Weave doesn't. Or they don't own the land. They don't have the connections to the power grids. They have to go to the Irons and the Ciphers or the Core Scientifics and do partnerships with those players to get access to those data centers. And so anytime they sign a deal with a big hyperscaler, they've got to turn around and wait, Iran owns.

[A]

Actually owns the data center and Core Weave is leasing it.

[C]

They don't partner with each other. But I'm saying that Cor Weave, you know, has to do deals with Iron and Cipher because they wanted to position themselves as we're asset light. We're, we're. Somebody has to fiscally own, you know, high margin so we don't get into the weeds of owning that land. But it turns out that actually owning that land, having the connection with the local power authority, utility and at a fixed rate, by the way, like, that's critically important to, you know, being able to deliver the kinds of gigawatts that. Now these hyperscalers, this is a land.

[A]

Or a facility owner, so they buy.

[C]

The land in, you know, Iron. And in West Texas, predominantly, they've got like two huge sites coming online where they actually bought the land. They negotiated the deals for the power consumption rates, and then they started physically building out the data centers themselves before actually then going to the hyperscalers and signing the deals with them. Okay, so they're kind of coming up from underneath of Core Weave and almost like disrupting Core web stock.

[B]

Holy shit. Stock was like five bucks in April. Now it's 67.

[A]

Yeah.

[C]

So I bought.

[B]

How have you owned it?

[C]

I started buying it at nine bucks.

[A]

Do you still think. You still think it's going to 100x from 9 bucks?

[C]

From 9 to 900?

[A]

You think so?

[C]

So it's now at 70 something, I.

[B]

Think, or something low 70s, $18 billion market cap.

[A]

Wait, hold on. Don't interrupt the process by which I make money here. Cipher is the same thing.

[C]

Same thing, but smaller. All right, but the thing that's big about both Iron and Cipher is that the reason why I like them, as opposed to a core Scientific or some of these other players that are out there, is that Iron and Cipher have 3 gigawatts in their pipeline that are going to be turned on or energized in the next 12 months.

[A]

Like it's under contract. We know they're going to have it.

[C]

So when you hear that Microsoft saying, oh, we're Going to spend more money on capex to build out more data cent centers. That's probably like five years away for them. Right. Because they got to go out and they got to buy the land and build the data centers. So they're going to be looking to do deals with people that actually have access to the data centers now. So when I was buying it at nine bucks or cypher, I was buying, you know, just below four bucks. You know, like people were saying, oh, these guys are just like former bitcoin miners. Who cares about bitcoin miners? Those traded at a low PE and all this.

[A]

Is that what they did though? They transitioned from bitcoin mining to this?

[C]

Yeah.

[B]

So.

[C]

So they learn from how they built out their data centers for running Bitcoin mining.

[A]

So 8 was a Bitcoin miner. Is it still?

[C]

It is still, still. And it has a new partnership with the Trumps.

[A]

H u t guys.

[C]

Yeah. So they partner with. There's a new ticker called American bitcoin where they own 65% of it.

[A]

I only buy American bitcoin.

[C]

And so Eric Trump and Don Jr are kind of JV partners with them in that. But they're basic hut's main businesses similar to iron and side or where they, they're building out all these data centers.

[A]

So you like, you like this theme.

[C]

Because basically the energy shortage theme.

[A]

Okay.

[C]

Like there's not enough to, you know, to power all these queries for chat GPT.

[A]

Okay. Sana Biotechnology S A N A. This company is working on a cure for restless leg syndrome. I'm told.

[C]

Type, type 1 diabetes.

[A]

Same shit. All right, so this is a 100 bagger.

[C]

It's a biotech. It's a $1 billion stock today. So to go to $100 billion, that's a lot they would have to prove. You know, they've basically shown that they, they've taken a stem cell approach to kind of developing drugs. And the first application of their particular approach to stem cell research was in type 1 diabetes. And they had good animal results. But just earlier this year they showed in a very small handful of humans, basically they, they, you know, cured them of type 1 diabetes. So type 1 diabetes.

[A]

Cured, not treated.

[C]

Yeah, cured to this point. To this point where they, they're. They're what? Their what, what they developed was able to help these people develop the ability to produce more insulin, which is what goes away, which causes type 1 diabetes.

[A]

Who do they have a partnership with in, in large pharma? Anyone?

[C]

No. Nobody?

[A]

Yeah, so that's a big catalyst when that happens.

[C]

Right. That and also they've got to go through the process showing like on a bigger scale in a human scale.

[A]

What does Feuerstein tell you about it? Does he like it or who first?

[C]

No, I haven't, I haven't spoken with him. I've spoken with others and one of my sons actually has type 1 diabetes. So like I've been, you know, so you, you know, I've seen firsthand like what it's like and, and, and 100 years ago, I mean anybody with type 1 diabetes would, would be dead basically within a few months. So it's a, it's a huge market opportunity.

[A]

I like that one. I want to make sure we get to the rest. BTQ Technologies.

[C]

So it's a quantum play. Next it's post quantum cryptography. So basically if you. Well everybody else out there is sort of building quantum computers.

[B]

Post quantum.

[C]

So reget. So the thing about quantum.

[A]

Just buy it. What's wrong with you?

[C]

So last January, Jensen Huang said oh, I think Quantum is like 30 years away. Right. And now everybody's saying oh actually including Jensen.

[A]

Well he created an uproar with that.

[C]

Yes.

[A]

And then he's like all right, sorry.

[C]

And it was self serving too because guess what, like if quantum computer really was developed, you know, a QPU would displace GPUs that Jensen sells as kind of the new kid on the block. So you have these like small little startups like Ionq and Rigetti trying to.

[A]

Build their own quantum computers smaller than those.

[C]

Well, they're trying to be the, you know, you'll like this. They're trying to be the crowd strike for quantum. So they're basically trying to prevent a quantum attack. Because why would you want to prevent a quantum attack?

[A]

Oh, it's cybersecurity for the quantum age.

[C]

Quantum computer could hack into everyone's crypto wallets and basically steal all.

[A]

The only way to fight a quantum computer is with a quantum computer. Right, we all know that.

[C]

So okay, so that's what they do.

[A]

All right, we'll check in on that a couple of years from now. Defi Technologies. Deft.

[C]

Yeah, I've been in this one a year and a half started their core business is they, they basically sell ETFs for crypto in Europe. And so not kind of a slow growing, not exciting business. But they are just now getting into using their knowledge of how they can create these kinds of crypto related instruments and get them listed on exchanges. They're actually trying to tokenize all the sovereign debt in the world, which hasn't been tokenized as yet. So it's a super small market cap company, super big ambitions. Maybe it'll work, maybe it won't. It's obviously like a big asymmetric payoff.

[B]

I don't think it's going to work.

[C]

Last.

[A]

All right, last point.

[C]

They have the knowledge and ability to kind of do it and going after it. That's right.

[A]

You say Ether and Eth. Adjacent scaling is a company called Etha. This is a public company. Is it a, is it a Treasury or it's something else?

[C]

No, this is just a. The etf, like the black. Oh, this is the ETF for Eth.

[A]

Oh, Etha is the ticker.

[C]

Yeah, so, so it's, it's, it's just a bullish bet on Ethereum.

[A]

Why not just buy Ethereum? Why buy the etf?

[C]

Well, I would say like wait a month or so and there's going to be a Gen 2 Treasury stock, hopefully trading called, which is mine, which will be multi asset including Bitcoin and Ethereum and some other Carvana coins that will be part of our treasure.

[A]

We'll have, we'll have you on, we'll have you on to talk about that. That I guess the question, the question is would you like to hire me as your business manager? Well, let me pitch you the idea first. This is like you're gonna get, you're.

[C]

Gonna get me into merch.

[A]

You know, we're gonna go so far beyond merch. You know how we're like in this moment where the more extreme version of something is the one that wins versus the more moderated ver. Look, I mean look who we just elected. Mayor Trump. Well, Trump too. Both sides heads. It's just whatever is the loudest, most extreme, craziest shit that people would normally be like. That'll never happen. That's the thing that happens. Like the craziest outcome is the most likely. That's what most people, when you talk to people on the street, feel about the world that we currently live in today. There are some scientific reasons for that, including the Internet and just the ability to amass huge followings for things that stand out out. So all right, we all understand that concept. You could have like the first meta. Meta meaning like, like almost like ironically like an in joke. You could have the first meta active etf. We literally call it lottery and. No, but see, you see, your reaction. This is the problem with people today. No, you see your reaction. That's the reaction I want guys. My new active etf it's a collection literally of lottery tickets. Get long. This thing with money that if it goes to zero, you don't care. If you got a million people to put $1,000 into this, you would have one of the biggest active ETFs in the world. And that could be your base of capital. The way that Buffett has insurance premiums and different people do fund of funds and they get consultants to send them out money. This is how I get money for my etf. I tell people it's literally a collection of lottery tickets. Some are 0, some are 100 baggers, some are 500 baggers for all I know. But this is explicitly what I'm doing.

[C]

Yeah, no, it's always.

[A]

You think that would be a hit?

[C]

Yeah, I think so.

[A]

And yes, I care right now about that. I feel like.

[C]

Well, I don't think there's anything wrong. It's a venture capital model applied to public stocks.

[A]

Yes. And you're telling people you're probably going to blow up.

[C]

Look, if I have 10, 10 investments.

[A]

Sounds like he's on board.

[C]

If I. No, I'll make the case. If I have 10 investments. Okay. And one is 100 bagger and you know the rest. You know, a few like keep their value and a few, and, and a.

[A]

Few go up a little bit, seven.

[C]

Go to zero, which never happens for public stocks. I'm still, I'm still sitting on a 10x in my portfolio from my 100 bagger in one position. Right. So that's the value of slugging percentage.

[A]

But you need one, but you need one of those. But you do need one of those.

[C]

Yeah. And the critic, the critics will say, oh, but like Carvana was a fluke and you know, it'll never prove him wrong. How, how often can you find 100 bagger? So I remember I tweeted at one point like I, I, I, I anticipate or I Hope to find one of these 100 baggers every six, six months or something. And people were like, much, Come on.

[B]

I mean that is, that is, that is insane.

[C]

Yeah. How many do we have now? Like we've got it like, well, I.

[A]

Don'T know how many companies, how many companies ever 100x from single digits. It's got to be a tiny number. It's not a big number.

[C]

No. And it's getting harder and harder the more the open eyes of the world stay private. You know, like it'd be easier in the 98, 99 when the globe.com was IPOing with no revenue but so, but.

[A]

What I'm saying is like people are willing to look. We see people doing zero day till exploration options in record numbers. People are doing lottery tickets already. They're sports. They're doing more sports gambling than they are retirement investing.

[C]

Right.

[A]

So we can't change the world. We can feed the public what it wants.

[C]

I mean that's one thing I'm trying to do with this whole rising dynasty thing like and communicating with this middle class, you know, open army folks that are following us. It's like don't waste your money on these like you know, sports betting. Don't, don't. There's so many ways.

[A]

Your money on my penny stock.

[C]

0Dtes no Carvana good. Open door good. You know. 0dtes and sports betting bad, you know, is sort of my message.

[A]

So you're telling people, all right, I get it, you're gonna gamble because you're middle class and you don't see a path to yourself.

[C]

But they're telling me they're doing this anyway.

[A]

That's right.

[C]

You know, I get so many messages from people saying, you know, hey, I'm an electrician, I'm a pipe layer or whatever. You know, I had a guy who's like a painter. Like he paints houses and stuff. And he was saying like I spent three, four hours a night night studying stocks and we had a debate about.

[A]

Is that your painting?

[C]

We talked about, we talked about post quantum cryptography in this btc.

[A]

That must have been a fascinating conversation.

[C]

He knew more about it than I did.

[A]

Before we wrap, so if you were to launch the lottery fund. Okay. And I'll just give that to you. You could just have it. I want a board seat. Every, all the traditional media would be this is the time top Barons, Financial Times, it would point to you, this charlatan is selling people a dollar in a dream Grifter. You know how much money you would raise because of that negative press? In today's day and age, the press doesn't even understand that it works this way. We understand it.

[C]

I had a coffee with Tim Sykes, you, you know, you know, a few, few months ago here in New York and he was like, you got to, this is great what's happening with you and open Door. You got all these haters, you got like Martin Shly coming after you and, and all this, it's perfect. You want that, you want the energy. Because when the energy is there with the positive and the negative, strong feelings, it's. People are paying attention.

[A]

Care.

[C]

They care.

[A]

All right, dude, I, I I wish you luck, pal. I think what you're doing is super interesting. I love it. I love that it's working for you. I hope it keeps working for you and your army. And you know, I'm a fan of yours personally. And to see you finding professional success doing something this much fun, Fun. I feel like it's.

[C]

It's cool.

[A]

So I appreciate it. If I've ever given you the impression. Thank you, guys. If I've ever given the impression that I don't think it's cool, that's not the case. I. I'm rooting for you. You know I am.

[C]

It's all good.

[A]

All right. How do you feel?

[B]

No comment.

[A]

No comment at all. This will end in tears. You could say it. One of us should probably say it just to hedge the show.

[B]

I mean, I think a lot of this is nuts, but I hope it works.

[A]

Well, it's worth.

[B]

Yeah, good.

[A]

It is.

[B]

I hope it continues to.

[C]

A lot of the stocks are nuts or a lot of the philosophy.

[B]

The post. Post Quantum. You lost me at post Quantum. I hope it works. I want people to make money, so I hope it works. I hope it goes to 81, 89. Cause that would be the funniest thing ever. I'm kidding. I hope it goes to 89.

[A]

Now. We always end the show by asking people what non extradition country they're planning to visit when their portfolio blows up. What are you thinking, Panama? What do you got in mind, dude? What are you looking forward to? Tell the. Tell the audience. Well, I'm finally buying the stock.

[C]

I'm looking forward to the Open 82 party in Vegas. So now that's become like a meme unto itself. And like, people have made AI videos.

[A]

What is this?

[C]

People want to have a party when Opendoor hits 82 bucks a share. Oh, and so. And then they were debating, oh, should we do in Tokyo, Louisiana. But Vegas. Vegas won. And. And then so somebody. I got on Sora or one of these AI video generating sites and created like a video of like Drake and Eric and Keith Raboy and like all these people. So, you know, I think that would be pretty cool. People have told me, like, I'm flying in from Antarctica, I'm flying in from Mongol.

[A]

The party will. So I'll tell you how it's actually going to go. Drake is promoting steak, which is a gambling app. Drake is not afraid of controversy in any way, shape or form. He actually courts a lot of negative attention, especially these days. He thinks he's a supervillain. And Drake is going to buy the stock. And the party's not going to wait till Vegas at 82. It's going to be in Toronto. And I feel like that's going to be your if. If you can make that happen. Even if the stock doesn't go to 82, I feel like you'll still be pretty satisfied.

[C]

You guys. You guys will be invited, and then.

[A]

Your kid gets to meet Drake and it all comes full.

[C]

All right, dude.

[A]

Rooting for you. I'm afraid for you, but I'm rooting for you. And I just. I hope everybody can make a lot of money. All right, that's it for the show this week.

[B]

Week.

[A]

I want to say a huge thank you to. To John, Duncan, Nicole, Rob, Charkid, Matt, Sean, We've done some incredible. Daniel, who else am I leaving out? Graham, Keith, We've done some. Travis, We've done some incredible work this week on video guys. Animal Spirits on YouTube. Every week hits so hard. What else? Ask the compound has been good lately. It's always good, but especially good lately. Yeah. And last thing I want to tell you about is the ownership channel. So we have a lot of markets conversation on the compound. The ownership channel is about what wealthy people or business owners or founders or employee shareholders of companies actually do with their money. Not trading, but really more about just the process of being wealthy, becoming wealthy. What are the right things to do? We have an awesome interview up with Jon Chaffetz from Timberlane. If you haven't checked out the ownership channel by Ritholtz, now would be a good time. We'd love for you guys to watch it. Give us some feedback. Tell us what you think. All right, that's it from us. Thank you so much for listening and watching. See you soon.

[B]

We gotta listen one more intro that.